Paypal fraud protection is a load of bull. I got ripped off before for about $400US, I contacted my bank and they eventually clawed the money back from Paypal after I notified them of the scam and nothing happened. Then a while later I tried to use my Paypal account only to discover it was frozen, I emailed them and wrote to them in hardcopy and never got a reply. Then I rang them and they said that they would only reinstate my account if I paid the $400 back to them - even though they were supposed to protect their clients in the event of fraud... so I told them to f%*k themselves. To this day I havent been able to set up another account because they have my name and address on their system so even if I use a different credit card I can't get an account, which is a real pisser when it comes to E-Bay. Anyway, long story short, I got my wife to set an account in her name based at her folks address.
Moral of the story, if it looks to good to be true then it is - and don't ever count on Paypal protection against fraud. If you must buy something on Ebay, get it from a powerseller or someone with a high level of feedback from buyers (read any and all negative feedback).